A new retrospective federal inheritance and gift tax?

January 2, 2012

A popular initiative called “Million-estates for the AHV (Inheritance Tax Reform)” was launched in August 2011.  It aims to introduce a federal inheritance and gift tax at a flat tax rate of 20%.

At present, the constitutional power to levy inheritance and gift taxes lies exclusively with the Swiss cantons.  However, most cantonal inheritance and gift tax laws set out exemptions from inheritance and gift taxes for spouses and direct descendants.

The proposed changes include the following:
the Swiss confederation will have the exclusive power to levy inheritance and gift taxes;

The initiative proposes the following exemptions from the new federal inheritance and gift tax:

Furthermore, special tax reliefs are proposed in the case of the succession of family businesses and agricultural operations, provided that the beneficiaries continue the businesses/operations for at least 10 years.

The new federal inheritance tax will be imposed on the estates of individuals who were last domiciled in Switzerland or whose succession was initiated in Switzerland.  The federal gift tax will be imposed on the Swiss resident donor.


From a constitutional point of view the retroactive effect of the initiative as of January 1, 2012 is controversial.

Should the initiative be successful it is likely that it will come into force on January 1, 2016.  It is, however, important to bear in mind that from January 1, 2012 donations exceeding CHF 20,000 will be added to the estate and subjected to the federal inheritance tax at the effective date of the new law.

Swiss residents – including non-Swiss nationals who have taken up residence in Switzerland for employment purposes – should consider whether they should seek tax planning advice in view of a possible approval of the initiative by the Swiss sovereign.



For further information or to discuss any of the issues raised, please contact Walter H. Boss or Stefanie Monge on + 41 44 220 12 12.


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